Sunday, August 17, 2014

The IMF, the World Bank and all the major economic institutions,
both public and private, have been constantly lowering their forecasts for expected
global economic growth during 2014-15.
Add to the above not so bright news the fact that Lebanon is situated in
a neighbourhood that has been rocked by war and political instability for over
3 years and it becomes evident that the Lebanese economy needs economic growth
if for nothing else but to service its international sovereign debt.

Obviously, tourism a major sector for hard currency earnings
and a substantial employer is not the magnet that it used to be. Not many
people will make war torn areas their destination of choice no matter the
climate and the other physical endowments. The volume of international funds
that flow into the country from Lebanese abroad have also declined with the
relative decline in the rates of economic rates of growth in the rest of the
world. Luckily there is a way for Lebanon to make a substantial sum of funds
available for consumption expenditures that can be guaranteed to stimulate the
level of economic activity.

The idea that I chose to highlight is not new but it is time
for the government to undertake immediate reform of the electricity sector
since the financial burden, besides the economic productivity implications,
carried by the Lebanese private sector is becoming intolerable.

Just take a look at these figures: The official rates
charged by EDL are fictitious, fictitiously low. If an average household is to use about 7200
KWH per year (600 KWH per month) then the monthly charge would be under $50.00.
That would be a phenomenal bargain except for the fact that the national
electricity company (EDL) does not supply even half of that and whatever it
supplies is provided at a loss of over $1 billion a year. It is clear that a
state cannot aspire to be a tourist destination and yet have severe electricity
rationing every day of the year. That, however, is not even half of the story.
Since no household, rich or poor, large or small can afford not to have
electric power 24/7, the Lebanese had to improvise. They did that by setting up
small private electricity generators for every neighbourhood that kicks in as
soon as the government electric power is cut off. These private generators use
the infrastructure of poles and cables of the official grid and are run on diesel
power which is dirty and expensive. Currently it is estimated that the price per
Amp is about $100 and most homes need about 15 Amps and some need 30 Amps or
more. Since neither the Lebanese government nor EDL provide any up-to-date
information about the number of residential subscribers and their estimated
annual consumption this brief analysis assumes that the cost of electricity per
household is about $375.00 per month. (BTW, that is more than twice what a
typical NY family pays for the same amount of electricity although its average
income is probably four times as much).

Based on the above the average annual cost of electricity for
that typical Lebanese household is around $4500.00 which is at least 15% of the
annual earnings of that household. If the Lebanese government can take steps,
and it should, to provide that electricity at an average saving of say $300 per
month per household then the sum for about 1 million households will be $3.6
billion a year. If one is to assume that only half the household are affected
then the annual savings will still amount to $1.8 billion dollars. All such
hypothetical savings will be spent on other consumer goods and thus would help
revive the economy.

So what can the government do about this situation that has
been allowed to fester for over 20 years?
At least 3 things:

(1)The government can open the field for private
investors and encourage competition. The new field should be tightly regulated
to prevent consumer abuse. If electric utility firms in some of the highest
wage countries in the world can deliver reliable electric power in the range of
$0.1 -0.15 then the average bill for our typical customer should drop to about
$75.00 per month.

(2)Encourage through a major well-advertised and well-funded
program the installation of solar collectors on roofs of individual units.
Again such installations are being provided by profit seeking free market
companies in many parts of the developed world at a cost of under $3 per watt.
Our typical household would need a 3.5 KW system in order to produce the
approximate 7200 KWH per annum. This means that an outlay of about $11000.00
would supply the 7200 KWH of electricity for that household for a period of 20
years. That would amount to a payback period of under 21/2 years. No new
buildings should be given permits unless such a PV system is included in the
structure.

(3)Construct an offshore wind farm funded by the World
Bank to supply at least 500 MW.

(4)Phase in a doubling of the current rate
structure charged by EDL over a period of 2 years.

(5)Outlaw any private electricity production by
private contractors that use diesel power.

(6)Adopt a delivery charge from each of the new
private large suppliers as a compensation for their use of the present grid.

A program styled around the above parameters
would find EDL operating at a zero deficit, consumers spending less for their
electric needs, a cleaner environment with less CO2 emissions and a more
reliable electricity and competitive electricity. Just the savings from
eliminating the EDL deficit and the excessive unwarranted current payments by
the consumers would provide the treasury with a savings of over $1 billion and
the consumers with about an additional $2 billion of discretionary income. This
sum of about $3 billion represents a 10% in consumer spending based on the
estimate that total consumption amounts to about $30 billion a year. It is also
to be noted that no new funds from the government are called for except to
build an offshore wind mill farm plus adopt a program to spread fund
residential PV systems. I am almost certain that funding for the above programs
can be easily arranged through an international agency since both are self-financing
and thus make no claims on the limited finds of the state.

Saturday, June 28, 2014

Exactly 100 years ago Archduke Franz Ferdinand was killed in
Sarajevo on June 28 , 1914. His assassination set off a series of actions and
counter reactions that ended up in one of the greatest tragedies of the 20th
century, World War I. This tragedy is relevant to us in more than one way.
Obviously the most basic reason for recognizing this day is the hope that the
more we think about these tragic events the less likely humanity will be
subjected to them again. But another important reason for us is the idea that
WW I was a perfect example of unintended consequences. No one wanted to start a
world war but the assassination spiraled out of control and ended up in a war
that lasted for over 4 years , and resulted in an estimated 37 million
casualties.. But there is another reason for us to think about this issue and
that is that it culminated in freeing the ME from 400 years of Ottoman rule.

So many articles and thinkers have written about how is it
that we might be witnessing the end of Sykes Picot, an agreement that is often
described in negative terms by Arabs and many even go as far as to claim that
all our problems, and there are so many, can be traced to the political
subdivisions that were drawn after the fall of the Ottoman Empire.

I do not subscribe to that vision except in one detail. One
can argue very convincingly that had it not been for WWI, the resulting Mandate
and the Sykes Picot agreement then possibly the Balfour declaration/Promise
might not have been issued and the ME would have been spared the last seventy
years of instability related to the establishment of the state of Israel. But
if we are to set aside the Balfour Declaration then I cannot find much that is
at fault with Sykes Picot.

Note that Figure1 is a map that would make it clear
that the whole of the Arab world, including

North Africa, was
ruled by the Ottoman Empire for four centuries . Roughly1516-1916.

Figure 1: Ottoman Empire Arab World was under Ottoman Rule of Selim I

Then in1916 the infamous Sykes Picot subdivided part
of the Ottoman Empire into two regions of influence,one British and one French. (figure 2) .

Figure 2: Note that Sykes Picot did not establish boundaries but only spheres of influence

The
Sykes Picot agreement resulted in about 25 years of the

Mandate Figure 3.

Figure 3: The Mandate powers proceeded to carve out the current countries.(The French gave away Alexandreta to Turkey and initially planned an Alawite Republic as well as a Druze one).

The two Western powers of France and Great Britain divided the area taken away from the Ottoman Empire into the current major
countries of the M.E. Figure 3.

After Sykes Picot gave each of the two European powers an
area of influence they then proceeded to carve up the countries that make up
the current Middle East. But each of the countries created was able to become
independent by the mid 1940’s. Figure 4.

Figure 4: The current boundaries and dates of independence

This is an important point since it
makes it clear that the mandate which created the boundaries between Lebanon,
Syria, Iraq, Jordan and Palestine/Israel lasted only for 25 years.

Based on the above and the accompanying maps one needs to ask
again whether it was the 25 year mandate or the 400 year Ottoman rule that
played a more crucial role in shaping the identity and culture of the people in
this region.

If, as it is often claimed, that the current political
borders created by the mandatory powers after the Sykes Picot agreement created
political divisions that are not acceptable then why weren’t there any major
movements to correct that flaw and redraw the borders. It is easier to protest
a perceived injustice but is more difficult to prove that such an injustice has
taken place. Would it have been better to the inhabitants of the mandated areas
had these artificial boundaries not been created? Is there a shared national
identity between the residents of these countries in question and are they
ready to accept the other and accept the demands of democracy and
responsibilities of citizenship that would be required in an efficient modern
state? Even if the answer is yes then wouldn’t it be better to create a
federation where each of the member states can control its own internal
affairs.

I am willing to be a Giraffe ;put my neck out J; by saying that the
“death of Sykes Picot has been exaggerated” and that the current map of the ME
would hold with very little changes , if any. Ideally the most important
radical change would be the settlement of the Israeli Palestinian question. The
Kurdish issue would not be so much of a problem had Syria, Iran and Turkey been
able to treat all their citizens equally, an autonomous Kurdish region might be
the only other alteration of the current inviolable boundaries. I imagine that
I am saying that ISIS will not fulfill its wish. No backward thinking group of
people ever do.

Friday, April 18, 2014

On October 22, 2014 Lebanon would celebrate the 25th
anniversary of the Taif accords that ended the Lebanese civil war. That is obviously
an occasion to celebrate and to be grateful that killings, destruction and divisiveness
are no longer on the mind of every Lebanese.But such developments do not take place in a vacuum. The solution
arrived at a quarter of a century ago was predicated on a radical change of the
Lebanese political system and I am not referencing the demand by Taif that
Lebanon has to get rid of confessionalism and add a Senate.

What Taif demanded and what the Lebanese delivered from day
one was a major transformation of the democratic system in Lebanon from being
Presidential to becoming a parliamentarian. But unfortunately, although Lebanon
delivered on its promise many of its citizens carry on as if there was no
change.The best proof of this willful
act to refuse and acknowledge reality can best be seen in the current maneuvering
regarding the constitutionally mandated Presidential elections in May of this
year.The Maronite’s act as if the
forthcoming President has the power to shape the political agenda, promulgate
laws and make a difference in governance.

How can Samir Geagea, a declared candidate for the Presidency,
promise that if elected then he would promise to bring about a large number of
fundamental changes in the way Lebanon is run? Doesn’t he realize that the
Lebanese president does not have the constitutional power to deliver on any of
his platform promises? Of course he does but neither he nor the mother
perpetual candidate, Michel Aoun, nor Bkirki nor any of the Maronite leadership
have the internal strength to admit the truth. I guess that this is a perfect
example of what cognitive dissonance is all about. It is the inability to admit the truth when it
contradicts ones desires, just like the fox who claimed that the grapes were
sour when he could not find a way of getting to them.

It is time, after 25 years, that the Lebanese in general and
the Maronite’s in particular develop the internal courage to face reality and accept that
Lebanon is no longer a Presidential democracyand that there is nothing wrong with that.Actually Lebanon will be in good company, if
it can only admit that its President is meant to perform essentially ceremonial
functions. That is exactly what the Presidents of Italy, Switzerland, Ireland,
Germany and Israel do. They accept the diplomatic credentials from ambassadors,
, act as ambassadors of good will and are a symbol of the state, a moral symbol
with no power.

Once the Presidential powers are viewed accurately then it becomes
clear that there is no need to wage acrimonious campaigns based around issues
that are not based in reality and that are not constitutional. Of course the
politicians are not speaking the truth to the Lebanese public when they keep
the charade that the office of the Presidency in Lebanon can still influence policy
in a major way. But even if some might chose to excuse politicians for this
major gaffe there is nothing, absolutely nothing, that can excuse the press for its failure to discuss
this idea and to enlighten the public about the truth. The press has a moral
obligation to inform and it has not.

Decision making, in all fields, are not expected to be efficient
and rational unless they are undertaken in an environment of as perfect of knowledge
as possible. In this case the matter is not that difficult to decipher. The
Lebanese President has no say in naming either the Prime Minister or any of the
cabinet members; he does not have the power or the right to vote during any of
the ministerial debates although he can chair such meetings. The Lebanese
constitution does not give the Presidency any executive powers whatsoever
neither does it allow the president to act in any capacity with the
legislature. Under such circumstances should rational people have major
disagreements on who is to be elected to fill such a highly visible but purely
symbolic position?

Samir Geagea, General Michel Aoun, Bkirki and all the other
Lebanese politicians must put an end to this misinterpretation of what the constitutional
presidential powers are. It is time that every Lebanese should read the
constitution to learn the truth and put an end to this corrosive and
unproductive ritual of pretending that Lebanon does not have a parliamentarian
system that dictates a ceremonial role for the presidency. Maybe we should
learn to speak the truth so that it can set us free.

Saturday, March 15, 2014

Many things in life are taken for granted and need not be expressly
mentioned and redefined at every turn. Freedom, liberty, self determination and
by extension the right to be free i.e. to resist occupation, injustice,
exploitation and dictatorship are among these concepts. These ideas are
intrinsic, natural and inalienable. They cannot be taken away.

Unfortunately there is a propensity in Lebanese politics to
assume that whenever two parties have a different way of interpreting an idea
then the solution is to be “creative” by coming up with a statement that
expresses allegiance and support to both interpretations that are exact
opposites. This is what I shall call the tendency to seek a solution through a superficial
application of the formula of “No winners, No losers.” But it
should be obvious that such a formulation is pure sophistry. It alleges that
both parties are right and that no compromise is necessary despite the fact
that each idea is the negation of its counterpart.

A popular and basic idea in economics is attributed to an
Italian by the name of Pareto. Pareto Optimality is roughly defined as that
allocation when the only way to give Pete is to take away from Paul. If it so
happens that the welfare of Ali may be improved without impinging on that of
Mustafa then we should definitely do so but once we are at the stage where
improving the welfare of one implies taking away from the other then we run
into the problem of winners and losers. In that case an action is justified
once the gains of one side more than compensate for the loses of the other. But,
and that is important, the solution is not predicated on a pretence that there
are no winners and no losers.

The right to resist is an idea that has strong support all
across the globe and across all institutions of governance. Whether it is the
idea of democracy, freedom of the individual, de-colonization, Universal
Declaration of Human Rights or International Law just to name a few major
international venues, these seminal ideas favour the right to resist. But then
one might ask who is this right given to?Well, that is an easy question since governments in a democracy derives
its power to rule from the people who have elected it to rule on their behalf.
There ought to be no subsidiarity between the state and its citizens as both
are but one. The state derives its power and legitimacy from the people who
agree to let it rule on their behalf. That is especially true when it comes to
the monopoly of violence and the right to make war and peace. Unless such prerogatives
are monopolized by the state then chaos would be the outcome and vigilantism would
become dominant. That kind of a society would be an invitation to an n
arrangement where no uniform laws are applied to the populace. It would be
nothing but an arrangement based on exceptionalism and favouritism derived from
the ability of each group to deny the power of the state and replace that by
its own illegal militias. That comes very close to a Hobbesian rule of the
jungle.

So what can we infer from the above?A cabinet is not chosen every once in a while
to redefine the essential rights and principles on which the state is built.
The rights of citizens, international obligations and the right to declare war
and peace are already spelled out defined and adopted. It would be counterproductive
to attempt to revisit and redefine such principles as if each group is entitled
to its own laws and interpretations. In that case there would be no rationale
for a government. The power of the state cannot be qualified in such a way as
to incorporate challenges to its power. Resistance belongs to the state that is
an expression of the people. If and when the state is no longer deemed to be a
representative of the wishes of its constituents then the citizens would vote
it out of office .The right to resist belongs to all, it is universal and
cannot be appropriated by any group at the expense of others. There is no
exclusivity in resistance and thus the matter ought to be assumed to be true at
all times. There is no benefit from treating this seminal right as an
exclusionary one and above all there is nothing to be gained by pretending that
a problem does not exist since the patient has been given a palliative. Honesty
and courage demand that we stop playing superficial games that do not treat the
root ailment. We have the obligation to note that a position and its negation
cannot coexist within the same healthy body. We either have a state or we do
not.

Friday, February 28, 2014

Every once in a while there is an attempt to confute what is
otherwise clear. That usually occurs when an entity is not well served if the
clear and unobstructed understanding of an idea or concept is to prevail. This
is when it becomes essential to manipulate the truth and spin the facts in an
effort to obstruct clarity and replace it by an intentionally false
interpretation of reality that is masquerading as the truth. This type of
obfuscation has been the primary rationale behind the self serving use of the
term resistance by Hezbollah and its allies.

The unfortunate thing is that they appear to have succeeded
in their effort to such an extent that very few if any, bother to call them on
their misuse and even abuse of the term resistance. It is ironic that no one in
the Lebanese political structure has found it important to set the record
straight and to challenge Hezbollah on its misuse of the term that it seems to
have monopolized.

The right to oppose
any power be it a domestic leader or an invader can be traced over 2000 years.
Historians speak of the Chinese who have initially solidified the right of
people to rebel against their rulers when such rulers lose legitimacy and rule
unjustly. This same right can also be seen in Islamic jurisprudence where it is
said that “there is no obedience in sin”. The right to resist and wage
revolution was also articulated clearly by Thomas Aquinas and later on by both the
American and the French revolution about 250 years ago. If this is not enough
then we must never forget the teaching of Thoreau about the right to use civil
disobedience that was later adopted and applied successfully by Gandhi in India
and Nelson Mandela in South Africa.

It is no secret that the right to self determination and the
right to resist abuse, injustice and exploitation have been recognized as an inalienable
right. Yes resistance is important and it is intrinsic. What it is not is the
attempt to monopolize it by abrogating it to a subgroup of people who are
intent on using pure raw military power to disenfranchise and even subjugate others.
The right to resist, to dissent, to rebel and disobey belongs to all people, it
is the most universal of ideas. It does not belong to one race, one religion,
one subgroup or what is worse to one political party. Resistance as an idea is
as close to sacred as one can get and any attempt to transform it to a
provincial concept must be viewed as nothing short of sacrilege.

The Lebanese political system, an almost perfectly
dysfunctional one to start with because of its sectarian base and political
feudalism has been rendered perfectly dysfunctional by the Hezbollah PR machine
that seems to have convinced practically everyone that the term “resistance”
has only one meaning and that is to describe every kind of activity by the
political party Hezbollah whether in the political, social, economic or even
the military field. That is obviously totally flawed use of the term.

The cost of such a misuse of the term is great. One could
easily suggest that the deep divisions in the current Lebanese body politic are
directly attributable to this confusion. Those who are strongly opposed to the
phrase “people, resistance, army” do so NOT because they do not believe in
their right and in the right of all people all over the world to resist but
because they do not believe for a second, and they are right to have such a
belief, that resistance is not to be treated as a pure monopoly that belongs to
a small group and that the group in question insists that it is entitled to be
treated as a special entity that is above the law and that it can and does use
its military privilege to dictate to the state. They demand support from
everyone and are obligated to no one.Once the concept of resistance is no longer used as if it is the private
property of a sub group of society then I assure you that there would be no
need to disagree about the meaning of a phrase whose meaning can be deduced
from the Universal Declaration of Human Rights. Resistance belongs to all and
is as intrinsic as any right can be. It is not the property of Hezbollah
despite all its sacrifices in fighting the Israeli occupation forces. The concept is what justifies the acts and not
the reverse. Exclusivity in resistance is a contradiction , it is in its universality that resistance attains its sacredness.

Saturday, February 15, 2014

A very popular saying by Einstein is specially made to
describe the new Lebanese cabinet. He has reportedly said that “only irrational
people will undertake the same experiment over and over again and yet expect
different results”. It took over 10 months to reshuffle the same deck of cards
of a weak hand to start with and to give birth to a new hand made up of the
same cards but in a different order, an insignificant change. If the first
dealt hand was considered weak then why would reshuffling the order make it
strong?

A related feature that needs to be highlighted is the
feeling that each of these politicians is a “Superman”; joined this time by a “wonder
woman” .
Is there any portfolio that Gibran Basil is not eminently qualified for? We are
told that this civil engineer was a perfect fit for Energy and that he did a
great job at Telecommunication. But since background and experience do not
matter in Lebanon, we are told to rest assured that he would be our best
Foreign Minister yet. Some have suggested that he was offered the Education
portfolio also because of his unbelievably strong background in that field. He
is very well read and understands all the trends in what it takes to have a
successful academic outcome for the new generation of Lebanese. That is what “Supermen”
are made for.

Fortunately for us, the Lebanese citizens, Gibran Basil is
not the only Lebanese politician with that great and unique capacity to excel
at any and all government portfolios. Wael Abu Faour, the young PSP politician
is equally blessed, maybe even more so than Mr. Basil. He has already served as
a Minister of State and handled the Social affairs Portfolio. Obviously that is
a perfect background for the Health Ministry which he is to fill in the new
cabinet. He is willing to undertake the responsibility of straightening the
governmental mess at any cabinet that Mr. Jumblat asks him to take. Mr. Faour
is such an obedient and loyal disciple that he will be more than glad to accept
any position as long as Walid Bey asks him to do so. What is more important to
the country? Is it qualifications for a post or is it the blessings of a scion
of one of the oldest Lebanese feudal landlords masquerading as a modern day
socialist?

Then there is the Shia duo of Fneish and Al Khalil. Each is
so sure of his expertise in all fields that they would never hesitate to take
on the challenge of a new position especially if that coincides with the narrow
interests of the Speaker and Sayed Hasan Nasrallah. Devoted and patriotic
cadres must always be willing to execute any and all demands of their party
leadership. Mr. Fneish conquered all the intricacies of the Energy portfolio
before he accepted the challenge of Labour and two different stints as a State
Minister.

And what can one say about Mr. Harb, the perennial presidential
candidate and the independent Maronite who will again be willing to march to
any length provided his name will stay in the limelight. This multitalented
lawyer has served as a Public transportation minister, an Education minister as
well as a Labour minister prior to his new role as the chief technologist in
the Telecommunication ministry.

We must not forget
also the willingness of the Kataeb to always offer party support
to any cabinet that will offer them any two portfolios.
The Kataeb , just like the FPM, PSP, Amal and Hezbollah have their own “supermen”
that can perform marvelously at any position.

And last but not least the Lebanese are blessed to have Al
Mustaqbal a party headed by a citizen who does not dare visit the country and
whose favourite means of communication is a daily Tweet probably worded by his
handlers. One day the Mustaqbal is not willing to join Hezbollah in a cabinet,
the next day they will do so if they get the Cabinet of Interior Affairs to one
of their favourite sons who is a master at sectarianism, Mr. Rifi. But once a
party is essentially leaderless and unprincipled then it is not too difficult
to get them to change their mind again. Obviously they accept to move Mr. Rifi
to the Justice ministry and rationalize their constant changes in positions and
ultimatums by using the thin logic that they will always sacrifice for the sake
of peace and tranquility. Only the weak keep on sacrificing.

What is obvious after this charade is that this country has
been ruled for a long time by whatever Hezbollah wants. Make no mistake about
it. Hezbollah is the clear cut winner in this unproductive game that has become
the hallmark of Lebanese politics, a game of incompetence and lack of political
maturity. Hezbollah forced the Hariri government to fall, and then they got the
Miqati government to replace it. They managed to postpone the Parliamentary
elections, to help the Syrian regime although they were part of a government that
declared to the world its neutrality in Syria. That is when it became advantageous
for them not to have a cabinet except in a care taker capacity and thus they
forced Miqati to resign. They have been preventing the formation of an
effective cabinet for over 10 months by playing the role of the master puppeteer.
FPM under general Aoun was, as always, more than willing to enforce the wishes
of Hezbollah to a t. But eventually the level of dissatisfaction by all this
dysfunctionality increased to a crescendo and so Hezbollah again comes to the
rescue. They force the Al Mustaqbal to go back on many of their demands, ask
Aoun to stop his obfuscation and get Tamam Salam to escape the label of having
failed to form a cabinet after the longest gestation period in the history of
the country. Mr. Salam has not done himself or the nation any favours. He
should have formed a small cabinet of qualified technocrats 10 months ago and
forced the politicians to take a stand.

Economists and psychologists tell us that Homo sapiens are
risk averse by nature. I am willing to take the opposite position. I will be a
Giraffe; put my neck out; by saying from the start that this cabinet will not
be any different or more effective than any of the last 4-5 ones. Pity the
Lebanese.